The recent sentencing of a Chicago-area dermatologist for fraudulent medical billing points to the need for detection of suspicious high volume dermatology claims. The dermatologist was sentenced to seven years in federal prison and ordered to pay restitution of $3.7 million, a sentence the judge deemed was warranted due to the seriousness of the offense.¹   At issue was the excessive billing of laser removal procedures for pre-cancerous actinic keratosis when the lesions were in fact benign and the treatment was not medically necessary.Actinic keratosis is a condition of pre-cancerous skin lesions that occur primarily on sun-exposed skin surfaces. Treatment for actinic keratosis is generally covered as medically necessary, based on the characteristics of the lesion. The diagnosis codes are as follows:

Treatment of actinic keratosis includes cryosurgery, curettage, dermabrasion, excision, chemical peels, laser therapy and photodynamic therapy. These treatments for the diagnosis of actinic keratosis are reported on claims as outlined below:

In contrast, the destruction of benign lesions would be reported on claims using the procedure codes as below:

The Relative Value Units (RVUs) for treatment of actinic keratosis is higher per lesion and involves more work than the RVUs for destruction of benign lesions. It is fraud for a provider to bill for the diagnosis of actinic keratosis when a patient in reality has a benign lesion. The definition of “fraud” is, “knowingly submitting false statements or making misrepresentations of fact to obtain a federal health care payment for which no entitlement would otherwise exist.”²

However, it must be taken into consideration that the destruction of benign lesions does not always meet criteria for medical necessity. If a treatment is not medically necessary, it would be deemed cosmetic and not billable to Medicare or to commercial insurance. Billing unnecessary services is considered “abuse” and includes “any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and priced fairly.^”3

Therefore, payers need to be on guard for these fraud and abuse situations by carefully monitoring claims for the codes for destruction of actinic keratosis to determine abnormal trends, and to ensure a corresponding diagnosis for actinic keratosis. Also, claims for destruction of benign lesions need to be monitored for meeting medical necessity.

What resources are available to payers in order to identify suspiciously high claim volume by specialty? Context⁴ Healthcare, a leader in claim compliance, developed the FirstPass™ claim editing solution with built-in edits to help payers identify potential overutilization, and/or potential fraudulent use of codes like the ones associated with actinic keratosis. With thousands of rules and millions of edit combinations updated weekly, FirstPass™ is SaaS-based with real-time web services so payers are always up-to-date with industry compliance and reimbursement standards.

In addition, payers who utilize FirstPass™ can add real-time access to Context's UCR fee data derived from billions of provider charges and updated twice per year. Real-time access to FirstPass™ and  DecisionPoint™ Health Payment System (UCR fee data) will go a long way toward achieving claim compliance and real-time analysis of claims.

For related reading from the FWA Briefs blog, check out: 4 Ways for Payers to Detect Fraudulent Therapy Services

¹   https://www.fbi.gov/chicago/press-releases/2015/west-suburban-dermatologist-sentenced-to-seven-years-in-federal-prison-for-defrauding-medicare-and-private-insurers-of-3.7-million

²  https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Fraud_and_Abuse.pdf

³   https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Fraud_and_Abuse.pdf

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